Insurance Department joins in $40 million settlement with MetLife Insurance

Post date:Apr 23, 2012

BISMARCK, N.D.-North Dakota Insurance Commissioner Adam Hamm announced today that the North Dakota Insurance Department is one of six lead states that have entered into a multi-million dollar settlement with Metropolitan Life Insurance Company (MetLife) and several of its affiliates.

The lead states-North Dakota, California, Florida, Illinois, New Hampshire and Pennsylvania-conducted a multi-state examination of several companies in the MetLife family to investigate certain practices and procedures with respect to identifying and paying out proceeds to beneficiaries under life insurance policies, annuity contracts and retained asset accounts.

The exam found several areas of concern surrounding MetLife's practices and procedures for identifying and paying out proceeds to beneficiaries and for reporting and remitting proceeds to state unclaimed property agencies when beneficiaries cannot be located. There have been questions recently about life insurance companies' use of the death master file, a Social Security database that records deaths, and whether companies were using that information to confirm that policyholders had died and beneficiaries were due payments.

According to the terms of the settlement, MetLife must regularly check the death master file, or a similar source of information, to determine whether any of its life insurance policyholders, annuity owners or retained asset account owners has died. The company must then make efforts to pay those claims to beneficiaries or to the appropriate state entity if the beneficiaries cannot be located. The practices agreed to in the settlement are expected to result in MetLife making payments totaling more than $200 million.

In addition to these business reforms that will get millions of dollars into the hands of beneficiaries or states on behalf of beneficiaries, MetLife will also make a $40 million payment to be allocated to participating states based on premium volume. The agreement will become effective after it is signed by 20 states.

"MetLife has agreed to make several improvements in how it searches for, locates and pays life insurance beneficiaries," Commissioner Hamm said. "The bottom line is this is a very good day for consumers, and will result in more beneficiaries receiving money they are entitled to."

Commissioner Hamm added that the company will be reporting every quarter for the next three years on the progress of these improvements, and that this multi-state settlement is an outstanding example of the strength, importance and collaborative nature of state-based insurance regulation.

Consumers with questions about the settlement are encouraged to call the Department at 1-800-247-0560.